Kraft Seeks PR Counsel For $31bn Snacks Spin-Off

LONDON--Kraft Foods is seeking European stakeholder counsel as it prepares to spin-off its $31bn snacks business.

The company is understood to have briefed five agencies for the critical assignment, aimed at helping Kraft build a stronger corporate brand in Europe for its new global snacks unit. The business draws around 40 percent of its incomes from the region, and includes such brands as Oreo, Trident, Milka and 2010 UK acquisition Cadbury.

Kraft announced its decision to split last year, less than 18 months after buying Cadbury in a $19bn hostile takeover. It will hive off its $16bn North American grocery unit from its $31bn global snacks business at the end of 2012.

The snacks division will be renamed but is expected to carry forward Kraft’s existing identity and values. However, a source familiar with the PR review told the Holmes Report that the company feels it needs to improve awareness of its corporate vision in Europe, and develop more credible connections with government, media and NGOs.

In particular, it is understood that Kraft wants its corporate narrative to be more aligned with its consumer products, and better equipped to navigate its numerous food-related reputation issues.

The five firms will present ideas to Kraft next week in London, before being shortlisted for the final phase of the review. They are required to devise launch ideas for the snacks business, and provide counsel that helps Kraft communicate how snacking behaviour can be part of a healthy lifestyle.

Kraft currently retains numerous agencies across Europe, including Blue Rubicon in the UK for corporate and public affairs support.

A Kraft Foods Europe spokesperson told the Holmes Report that it would “look to existing agencies, and possibly consider bringing new agencies into the mix.” She added that the pitch process focuses specifically on its Western European markets; accordingly it has contacted pan-European agencies.

“It’s the normal course of business to look at our agencies and the needs of our business moving forward,” said the spokesperson. “Looking at the upcoming split by year-end and our European business, we’re looking at what opportunities there are for us from a corporate perspective.”

The pitch will complete within the next two months. Last year, the Holmes Report revealed that Kraft was reviewing its UK consumer PR roster, a process that is understood to be nearing completion.

The decision to split Kraft in two has been criticised in the UK for potentially jeopardising jobs, after the company closed a Cadbury factory it had promised to keep open. The company announced earlier this year that it will cut 1600 jobs in North America as a result of the separation. Analysts believe that growth at the snacks unit will considerably outpace its North American business.

In a separate development, Kraft has hired Pepsico social media chief Bonin Bough as vice president of global digital and consumer engagement.